Size matters, especially in technology and entertainment. AT&T, with $164 billion in revenue and 268,000 employees, is No. 9 on the Fortune 500 list. Yet it's ready to spend over $100 billion for Time Warner, one of the largest creators of TV shows and movies. If regulators approve, AT&T will combine its distribution with content from Time Warner's HBO, CNN, Turner and Warner Bros. That would create new growth opportunities and a big upside: AT&T could become more indispensable to the millions who buy its wireless service, pay TV and broadband.

AT&T's core business stalls

AT&T has almost 150 million wireless subscribers in North America, but a key metric has peaked: Wireless revenue declined slightly last year despite AT&T's adding many tablets and connected cars. With a maturing wireless market and price wars, Time Warner becomes even more attractive.

Time Warner's growth arc

HBO, the top premium cable network, has 49 million domestic subscribers and 85 million international ones. Turner owns CNN and has three of the top ﬁve basic cable channels, including TNT and TBS. Last year, Warner Bros. ﬁlms generated almost $5 billion at the global box ofﬁce and produced more than 30 prime-time TV series.

"Millennials are watching TV and video differently, so the real upside is to have cool content tailored for the right screen, especially mobile. If AT&T and Time Warner just duct tape the two companies together, that's not success; that's ﬁnancial engineering. We're all looking for a lot more." — Roger Entner, founder and lead analyst, Recon Analytics

Wireless will matter less

As wireless plateaus, AT&T is diversifying. It bought DirecTV in 2015, adding 20 million subscribers, and Time Warner would bring about $30 billion in annual revenue. The new company plans to create more content for mobile, more bundles for viewers and a big new market for targeted ads.

"This merger is not only one of survival and opportunity but one that is needed by consumers. We need more companies with the ability to compete with Apple, Google, Microsoft, Amazon and Facebook. Delivering content to consumers in this app-driven world is not easy. It is very expensive and difﬁcult." — Mark Cuban, billionaire entrepreneur and star investor on Shark Tank

World's biggest mergers

AT&T has grown large with big acquisitions, including the source of its name. SBC Communications, ﬁrst known as Southwestern Bell, bought AT&T in 2005 and assumed the name. It also bought BellSouth, Ameritech and Paciﬁc Telesis. In 2015, AT&T added DirecTV, and with Time Warner, it's again moving beyond telecom.

"AT&T grew huge by consolidating the business it knows best, telecom. Then it gambled on the iPhone and DirecTV, and both paid off. Time Warner is another big bet but in a new direction. The $100 billion question: Can AT&T keep the hits coming?" — Mitchell Schnurman, business columnist, The Dallas Morning News